ENVIRONMENTAL ROADBLOCK: PRELIMINARY INJUNCTION SECURITY AND THE NEED FOR CHANGE.

• Author: Voitier, Madeline

TABLE OF CONTENTS INTRODUCTION I. The Preliminary Injunction: History and Background II. The Preliminary Injunction Security Element III. Interpretation of the Security Element A. By the Book: Mandatory Interpretation with Limited Exceptions 1. Recognized Exceptions i. No likelihood of Material Harm ii. Preserving Subject Matter Jurisdiction iii. National Environmental Policy Act (NEPA) iv. Indigent Party Enforcing Federal Right v. Deny Access to Judicial Review B. Discretionary View 1. Discretionary + Defined Exceptions 2. Ultimate Judicial Discretion IV. Answer to Environmental Prayers A. Why Environmental Law is Different B. Proposed Exception 1. Noncommercial Litigants 2. Environmental Support C. Dispelling Security Concerns D. Environmental Impact Statistics CONCLUSION APPENDIX "Nature provides exceptions to every rule." (2)

INTRODUCTION

Every living thing, whether big or small, shares one single unified earth--the protection of which is governed by environmental law. Environmental law not only encompasses the fight against ecological harm and the preservation of natural resources, but also the protection of unique cultures that are inextricably linked to those resources. For example, Louisiana's coastline is disappearing at the rate of a football field an hour due to oil and gas operations exasperated by climate change; each year, 16 square miles of coastline are simply wiped off the face of the earth. (3)

One would think that this stark reality would prompt swift and just legal action on behalf of the environment, but this is not the case. Rather, Rule 65(c) of the Federal Rules of Civil Procedure has created a chasm for environmental claims because these lawsuits cannot surpass the bulwark that a security requirement presents.

Rule 65 of the Federal Rules of Civil Procedure governs the granting of injunctions in federal court. (4) An injunction is a court order requiring a party to do or cease from doing an allegedly harmful action, the granting of which is left to the discretion of the court. (5) Temporary injunctions include preliminary injunctions and temporary restraining orders; the purpose of each is to preserve the status quo between the parties until a full trial on the merits. (6)

Alternatively, permanent injunctions are granted as the final judgment in a suit. (7) Preliminary injunctions, in particular, are paramount to environmental cases because the damage at stake is uniquely irreversible (e.g., environmental degradation, extermination of species, and destruction of historical landmarks). (8) Without this initial protection, the party's case is futile because the damage has already been done. (9)

Injunction security was devised to compel parties to weigh whether the risk of harm was worth potentially forfeiting the required bond. (10) However, in practice, rigid enforcement of the security element of Rule 65(c) prevents many public interest environmental litigants from bringing important cases--cases that are often essential to the enforcement of environmental protections, but which few other litigants, if any, have the incentive to bring.

This Comment first discusses the differing interpretations of security under Rule 65(c) and the recognized security exceptions. This Comment then advocates for a discretionary interpretation of security, while proposing an exception for public interest environmental litigants.

1. THE PRELIMINARY INJUNCTION: HISTORY AND BACKGROUND

   The preliminary injunction is a type of pretrial injunction meant to ensure temporary relief from an irreparable harm faced by a party. (11) A defining characteristic of the injunction is that it is only available to parties whose claim could not be justly compensated with money damages. (12) The injunction has its roots in equity, (13) a principle that advocates for the implementation of impartiality and fairness in decision-making. (14) This equity principle was derived from the English Court of Chancery, which the United States adopted through the Judiciary Act of 1789 and later codified into Rule 65. (15)

   The motion for preliminary injunction is a tool commonly used by environmental plaintiffs. (16) The party seeking a preliminary injunction must show that: (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm if the injunction is not granted; (3) the balance of equities tips in his favor; and (4) the granting of the preliminary injunction is in the public interest. (17) "If irreparable injury to the environment is sufficiently likely, the balance of harms will usually favor the issuance of an injunction to protect the environment." (18)

2. THE PRELIMINARY INJUNCTION SECURITY ELEMENT

   Historically, many courts were concerned about the potential material injury that an enjoined party may suffer as a result of a granted preliminary injunction. (19) In response to these concerns, the courts developed a security requirement intended to protect all parties. (20) This rule requires the moving party to deliver a certain sum of money (a "bond") in an amount determined by the judge to the court to be held as security in the event that the preliminary injunction was improperly granted. (21) The first purported purpose behind requiring security is that it would deter frivolous lawsuits, (22) essentially advocating for the age-old "put your money where your mouth is" argument.

   This viewpoint holds some merit because a party would not logically risk bringing a frivolous lawsuit if there is a chance that he will suffer financially. The second professed purpose for security is that it protects the enjoined party if an erroneous preliminary injunction is issued. (23) This allows the aggrieved party to collect damages from the security given to the court without enduring further litigation. (24) Similarly, this purpose also holds merit because it fosters efficiency and streamlines a wrongfully enjoined party's path to recovery.

   The security element has been codified into Rule 65(c), which currently reads:

   (c) Security. The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. The United States, its officers, and its agencies are not required to give security. (25) In 2007, the language of Rule 65(c) was amended as part of a general overhaul of the Federal Rules of Civil Procedure in an effort to make them more easily understandable and consistent throughout. (26) However, this intended act of clarity did not achieve its goal; instead, the federal circuit courts are conflicted in their interpretations of the security element--ultimately muddying the waters by creating precedent with opposing opinions.

3. INTERPRETATION OF THE SECURITY ELEMENT

   Although some circuit courts understand the words of Rule 65(c) to be mandatory, there is a debate as to that understanding. Accordingly, the courts' disagreement over the effect of the security element has resulted in a circuit split that has yet to be resolved. This spectrum of interpretation spans from courts that advocate for strict mandatory adherence to the security requirement, circumvention of which is only permissible under specific delineated exceptions, (27) to courts that purport to have unrestricted discretion to waive security. (28)

   1. By the Book: Mandatory Interpretation with Limited Exceptions

      Currently, the Third, (29) Fourth, (30) Fifth, (31) and Seventh (32) Circuit Courts have deemed the security requirement of Rule 65(c) to be mandatory. This side of the great divide adheres to a strict literal reading of the security element. However, these courts have also recognized certain traditional exceptions (developed through case law) that allow particular litigants to be exempt from posting security. (33)

      The Third Circuit most clearly stated its stance on the security requirement in Frank's GMC Truck Center, Inc. v. General Motors Corporation. (34) In Frank's GMC, the Third Circuit determined that "[a]lthough the amount of the bond is left to the discretion of the court, the posting requirement is much less discretionary. Although there are exceptions, the instances in which a bond may not be required are so rare that the requirement is almost mandatory." (35) Using this reasoning, the Third Circuit reversed the district court's granting of the preliminary injunction without security. (36)

      Similarly, the Fourth Circuit has unequivocally stated that security under Rule 65(c) is unambiguous and essential to granting a preliminary injunction. (37) In Pashby v. Delia, a case involving a challenge to a North Carolina limitation on an optional Medicaid program, the Fourth Circuit found that the district court erred in failing to consider security when granting a preliminary injunction. (38) The court stated, "[T]he district court retains the discretion to set the bond amount as it sees fit or waive the security requirement. However, the district court must expressly address the issue of security before allowing any waiver and cannot disregard the bond requirement altogether." (39) Notably, this demonstrates that even courts which strictly adhere to the words of Rule 65(c) believe that a discretionary implementation of the security requirement would not derogate from the purpose of the rule.

      Similarly, the Fifth Circuit addressed the security requirement in Continuum Co., Inc. v. Incepts, Inc., in which it discussed the purpose behind the requirement, its apparent mandatory nature, and the consequences of waiving it. (40) The court demonstrated its mandatory view by stating, "The bond can thus be viewed as a contract in which the court and plaintiff 'agree' to the bond amount as the 'price' of a wrongful injunction." (41) Impliedly, the Fifth Circuit views Rule 65(c) as a designated pathway to preliminary injunction, the first step of which must be...